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Is this strategy good enough?
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Created: by baruchs Attachments:6

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Is this strategy good enough?

  #91 (permalink)
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Quoting 
It is good odds..but the risk of ruin is way too high with such a small bank and only 2 possible outcomes each throw - lose 2K or win 3K at 50/50.

No you read it wrong. its win 2K and lose 3K.

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  #92 (permalink)
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...nearly 3am here oblivion beckons....no , not good odds then, he is coming the raw prawn isnt he?

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  #93 (permalink)
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ThatManFromTexas View Post
Why don't you just trade the dang thing ?

@baruchs

I'm still waiting for an answer.

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #94 (permalink)
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baruchs View Post
Do you want me to prove it?


baruchs View Post
Ok I'll prove it with your help in two ways. (You will need to answer questions)
First story:
You are going on a street and see on a corner some guy tossing a coin. You stand in front of him and stare.
From your left (the side is very important lol) comes another guy (or girl) and stands by you. All this time a guy tosses a coin. After a whial a guy on your left asks you if you want to bet on the coin toss. You ask him what are the odds that he gives. He says: If its head he will give you 2K and if its tail you will give him 3K.

Will you play with him? Is it a winning strategy for you?

p.s. Because you left your house in a hurry you took only 10K.

Comparing trading to a coin toss in this manner is pure bunk! My trading is not about a simple 2 outcome toss. If that were the case I could get a monkey throwing poop on a chart, and just trade where it lands So, in your example, no I would not take that bet. But if you tell me out of the previous 10 tosses 7 were tails and 3 were heads, and the last 3 tosses where heads, then YES, I would bet 3k on the next toss coming out tails. That would be more comparable to proper trading.

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  #95 (permalink)
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Ok so we established its a losing strategy for you.
The story continue:
You reply to the fellow on your left "No the odds are not good for me. No deal". He says "Well I have nothing to do I'll stay here if you change your mind."
After few minutes comes another guy from your right. He also stops and watches the coin toss. He approaches you and asks if you would like to bet on the toss. You ask him what are the odds he will give you. He says if its head you give him 1k and if its tail he will give you 4K.

Questions:
1. Will you bet with the guy on your right?
2. What will be the outcome for you if you bet simultaneously with both? (On each toss).
3. What is better of the two? (1 or 2)

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  #96 (permalink)
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baruchs View Post
Ok so we established its a losing strategy for you.
The story continue:
You reply to the fellow on your left "No the odds are not good for me. No deal". He says "Well I have nothing to do I'll stay here if you change your mind."
After few minutes comes another guy from your right. He also stops and watches the coin toss. He approaches you and asks if you would like to bet on the toss. You ask him what are the odds he will give you. He says if its head you give him 1k and if its tail he will give you 4K.

Questions:
1. Will you bet with the guy on your right?
2. What will be the outcome for you if you bet simultaneously with both? (On each toss).
3. What is better of the two? (1 or 2)

I will choose option 2. Left guy gives 2:3 reward/risk, Right guy gives 4:1, Both guys together 6:4

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  #97 (permalink)
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Quoting 
I will choose option 2. Left guy gives 2:3 reward/risk, Right guy gives 4:1, Both guys together 6:4

Can you tell me if in option 2 you can lose all your money?
Can you tell me what will be the outcome of each toss in option 3? If tail ? If head?
After that I'll give you a true trading example.

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  #98 (permalink)
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Automatic win under the scenario you've outlined; will win $1K on either heads or tails

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  #99 (permalink)
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Quoting 
Automatic win under the scenario you've outlined; will win $1K on either heads or tails

Very good. So we can make a rule. If strategies are loosly correlated or not correlated or even better, like here (correlation =-1), have negative correlation on the outcomes, then adding even a losing strategy can improve your position!!
Lets look into another example:
you have two strategies:
1. NP=40K DD=6K
2. NP=10K DD=1k
Which is better? If you can prove it I'll be very impressed.

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  #100 (permalink)
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monpere View Post
Comparing trading to a coin toss in this manner is pure bunk! My trading is not about a simple 2 outcome toss. If that were the case I could get a monkey throwing poop on a chart, and just trade where it lands So, in your example, no I would not take that bet. But if you tell me out of the previous 10 tosses 7 were tails and 3 were heads, and the last 3 tosses where heads, then YES, I would bet 3k on the next toss coming out tails. That would be more comparable to proper trading.

Wouldnt you want to know about the previous 10 to that? Maybe they were 9 heads and 1 tail!?

Writing to you from the wonderful province of Ontario, Canada. Home to the world's biggest natural negative ion generator, the Niagara Falls, and to those that dare to know how to go over it in a barrel. SALUTE!
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